Credit going down the drain. FAST!?

Question

After 8 months of trying do get a business off of the ground, my husband has really put us in the hole. We cashed out all of our 401(k) and now have a debt of $30k. There is no more home equity to cash out and we haven't made a credit card payment since August.

My husband now works in the field he was in prior to his business but at a job he's overqualified for. He's been searching for a better job since May but nothing has worked out.

Credit Counselors say they can't help us until we have a balance budget. Bankruptcy Atty say they can't help us until we have a balance budget.

I've written to all the creditors explaining that we do want to pay off but we don't know when. It's all based on when my husband can get a better paying job. At this time we can pay our 1st and 2nd Mtg and truck payment.

He doesn't want to get rid of the truck because we use it so much. My car is virtually worthless. '99 with 80k on it.

I'm working a part time job, too.

What can we expect?

I am a SAHM working part time. Took pencil to it and I'd bring home the same amount working full time and have our child in day care.

We owe too much on the truck. If we sold it the best we can expect is to break even.

We could do bankruptcy chapter 7 if we wanted to give up our house and truck. But our house is in prime location and I expect the value to skyrocket at which time we'll sell. (We are being annexed.)

Answer 1

Debt settelment is designed as an alternative to bankruptcy .There are good programs out there you just have to do your research look up www.ripoffreport.com see what negative feed the company has. This industry is regulated by the FTC . The BBB is not reliable enough. So many debt settlement companies do not practice with integrity or ethics, but the right company is a life saver. also make sure they explained the program thoroughly and that in their contract they take 15% or less for their services.Make sure they are licenced to work in your state. Don't go with a company that puts your money in an umbrella account. It takes a certain kind of licence to have client funding accounts set up and their are only 2 banks in the U.S. the FTC regulates and set aside for this purpose. Also make sure that they figure each debt individually at 44% and that the difference between what you paid into your account and what actually is paid on your debt goes towards your next principle. When it comes to your debt program it is very important to shop, the best price is most likely not the best company. A good settlement company will only take your first two payments to set up account. If they take more then the first two then they are deemed predatory and are more concerned about getting their money then they are about helping you. Know the laws in your state every state is different. Ask them worst case scenario. Also never do a program longer then 36 months. Dave Ramsey is an excellent guide but he and what we do are two different things. Debt Assistance programs were set in place to deal with aged collections, alternative to bankruptcy and for people that are totally overwhelmed. It is a hardship program. If the company you choose is legit one thing they will ask for is your story. They take your story to the creditors on your behalf, does make a difference.
Things will get better !
Kourtnie Donihoo
Debt Advisor
The E.D.A. Group
8666050753

Answer 2

If your truck is fairly new, you can refinance it and get a lower payment on it. You should try to get a full time job or work 2 part time jobs so that you can apply some money to the other creditors. Also, writing your creditors letters, probably won't help you any.I'd be surprised if your letters were even read. You need to call each one and speak with a person about making some kind of payment arrangements. Every month you don't make a payment is adding to the lates on your credit report. If you haven't made credit card payments since August, then you already have a lot of lates and your credit score is probably steadily dropping. Also, it won't be long before the creditors send these accounts to collections and that will cause major damage to your credit.

Your best bet is to try find some way to at least make the minimum payment on these credit cards. Don't wait any longer to call these people and see if they will work some kind of payment plan out with you.

Good luck.

Answer 3

You can dig yourself out of your own hole without the help of bankruptcy or credit counsellors, but you might have to work pretty hard.

If you don't have kids, I would suggest that both of you get second jobs and pay off one of your mortgages. You should be able to keep the house and cars.

Let the credit card companies go. Don't promise them anything. They're the biggest thieves when it comes to interest and service charges, anyway. After waiting for about a year, they'll likely settle for half of what you owe them just to get something. It's a little bit evil, but you can play them against each other. Let them know that you'll likely lose your house or car if you try to pay them instead (which could be true), and that any of them who are willing to accept 50% will get the first of whatever's left.

Bad credit isn't the end of the world. I was actually in a much worse position than you about 15 years ago. I learned to live without credit at all, and I think it's actually a better way to live. I have a house and two cars (all paid for) and no desire to get back into credit cards and no need to apply for any other kind of account.

Answer 4

Hello,just pray everything will get better. What about asking relatives for a loan,due to your situation. I do not understand why you couldnt file bankruptcy.
So far, you have done the right thing as far as writing the creditors. You said your working part time...have you tried finding a full time job,or maybe getting another part time job?It may not help by much, but every little cent does help.
What about possibly selling your home, and down sizing to something with a smaller payment then what you have got?Maybe you could sell your home for enough to help pay off a couple bills.Because of your hubby, you guys may have to make a few sacrafices untill you get back on your feet. I feel like he should try selling the truck(only if he doesnt owe alot and can get extra $ after payoff, to pay a few of the bills with) good luck honey, and I know things will work themself out.